Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Theresa May ditches big Brexit speech in effort to curb cabinet rows… Theresa May has abandoned preparations for a third high-profile speech on Brexit for fear of widening cabinet splits over Britain’s future relationship with the EU. The prime minister had planned to provide more detail of the so-called “end state” in an address next month on the same scale as those given at Lancaster House and in Florence. Downing Street has called a halt to the preparations, however, fuelling fears that differences in her cabinet are irreconcilable. One senior figure warned that “the concrete is setting”. – The Times (£) Theresa May forced to shelve her Brexit speech after row over Hammond’s ‘middle way’ out of EU – Daily Mail …after Philip Hammond launches fresh attack on Eurosceptics with call for ‘middle way’ on Brexit… Philip Hammond has launched an outspoken attack on Eurosceptics who he accused of wanting to sever trade links with Europe after Brexit and insisted: “We have got to stick to the middle way.” The Chancellor did not resile from comments he made on Thursday when he suggested that Brexit would only result in “very modest” changes to the UK’s relationship with the European Union. Instead, Mr Hammond doubled down and said that the “smaller the changes” to the UK’s access to the European market “the better”. Mr Hammond’s original characterisation of what he wants the UK’s new relationship with Brussels to look like sparked a fierce backlash among Brexiteers. The fact that he did not backtrack when asked to clarify on Friday is likely to further inflame tensions within the Conservative Party. – Telegraph Philip Hammond calls for Brexit ‘middle way’ after Tory fury – Sky News …as Jacob Rees-Mogg calls on May to be bolder on Brexit and accuses Hammond of trying to ‘thwart’ Brexit… In an interview with The Telegraph he said that both Brexit and the Conservative Party are more important than the Prime Minister’s leadership and warns that Britain risks heading for “Brino” – Brexit In Name Only… The Prime Minister, he said, must be bolder on Brexit. Mrs May has repeatedly refused to say whether she would back the Brexit she is delivering in the event of a second EU referendum, to the frustration of her backbenchers. “My personal view is that if you are in favour of something and if that is your policy it’s helpful to say so,” Mr Rees-Mogg said… He reserves his strongest criticism for Philip Hammond who he says is intent on “thwarting” Brexit and doesn’t actually want Britain to leave the European Union… In his strongest attack on the Chancellor yet he said: “Of course he is wrong. High alignment denies us Brexit. It is about obstructing Brexit. It is essentially code for saying I don’t want to leave the EU, I never did and I don’t think I’m wrong. It’s thwarting Brexit.” – Telegraph (£) Jacob Rees-Mogg: UK chancellor Hammond wants to ‘thwart Brexit’ – Politico ‘Soft-Brexit will lead to Jeremy Corbyn Government’ Jacob Rees-Mogg blasts remoaners – Express …with furious Conservative MPs demanding May gives Hammond ‘final warning’ in Brexit row Furious Tories demand Theresa May give Philip Hammond a “final warning” as civil war over Brexit threatened to bring down the Government. Former Minister Andrew Percy led a backlash as Philip Hammond infuriated his own MPs for a second day in a row over the EU… Mr Percy told the Sun it was time for the Chancellor to “get in line or get out”. He said: “If he wants to continue having his own Brexit policy he has to leave Government and speak from the backbenches. He should be given a final warning.” … Former Tory leader Iain Duncan Smith said: “This is getting intolerable. If the Chancellor or any other Cabinet Minister for that matter is not prepared to follow the Government line they should go.” – The Sun May has full confidence in Hammond, spokesman says – Bloomberg Philip Hammond begs mutinous Tories to back Theresa May amid fury over soft Brexit fears – The Sun ‘Timid’ Theresa May faces challenge to leadership and Brexit strategy from pro-Leave MPs – Telegraph (£) Theresa May’s allies fear humiliating confidence vote ahead of Brexit showdown – The Sun Tories’ Brexit agonies resurface – Laura Kuenssberg for BBC News Hammond’s indiscipline shows why May should have moved him – and why she must stop dithering over Brexit – Mark Wallace for ConservativeHome I regret being so polite about Philip Hammond. He is utterly unsuited to his job – Charles Moore for the Telegraph (£) One well-aimed speech could topple Mrs May – Matthew Parris for The Times (£) Can Theresa May survive as prime minister? – George Parker and Laura Hughes for the FT (£) David Davis plays down Tory row over Brexit transition as he calls for Britain to sign new trade deals during “implementation” period… David Davis has said there is “no difference” between him, the chancellor and prime minister following a Tory row over the terms of a Brexit transition. The Brexit Secretary said all three wanted the UK’s exit from the EU in March 2019 to “serve the British economy… and the British people”… In his speech, Mr Davis said that the UK would be able to sign new trade deals in the “implementation” period – thought likely to last up to two years. The UK would still effectively follow the rules of the EU customs union for the period immediately after Brexit and no trade deals could come into force until it ended… This speech comes three days before the other EU member states are due to publish their formal guidelines… for negotiations on the nature of a transition period after Brexit. – BBC News > READ: Full text of David Davis’ Teesport speech on an implementation period EU immigration to continue until 2021 reveals David Davis – despite Downing Street claims that free movement will end when Britain leaves the EU – Daily Mail Backlash over Davis’ suggestion that unlimited EU immigration will continue until 2021 – The Sun David Davis reveals Cabinet ‘arguments’ on Brexit – Sky News Three Cabinet Ministers – Hammond, Davis and Clark – offer Brexit assurances to UK businesses in open letter – Bloomberg Cabinet seeks to present united front after Hammond spat with joint letter to businesses on transition – Guardian > WATCH: David Davis full speech on implementation period …while calling for UK to remain in existing EU trade deals during transition… The U.K. wants to continue benefitting from the EU’s free-trade agreements with other countries during the post-Brexit transition, and will seek an “appropriate process for this temporary period” to ensure it still has a say in any rule changes that affect its interests during that time, Brexit Secretary David Davis said. In a speech on the transition period in Middlesbrough, Davis also called for the U.K. to remain a part of the EU’s security arrangements during the transition. Calling the transition “a bridge” to Brexit, Davis said he is “confident” an agreement could be reached by the March European Council summit. – Politico David Davis seeks Brexit transition agreement in March – FT (£) …and warning EU not to try to take advantage of Britain by forcing new laws on the UK during transition… The Brexit Secretary said [yesterday] that Britain “will still make our voice heard” in Europe in any transition period, and “respect must flow both ways”… Once Britain is out of the EU we will no longer be involved in the creation of new laws, but the bloc could make us accept new ones anyway during a transition period… “This will be a relationship where respect flows both ways. Each side should commit to not taking action that will undermine the other”. Mr Davis vowed that the EU must “find a way to resolve concerns if laws are deemed in contrary to our interests and we have not had our way. We will agree the appropriate process for this temporary period.” – The Sun David Davis demands UK say on EU rules during Brexit transition – Charlie Cooper for Politico Most Tory Leavers mostly relaxed about transition but… – Guido Fawkes David Davis attempts to ease Tory nerves over Brexit transition – Katy Balls for the Spectator …amid reports that British officials are in secret discussions with Brussels to extend Brexit transition period to almost three years The Telegraph understands that although it is not formally Government policy, Britain has discreetly begun sounding out senior EU figures over whether transition could be extended amid growing disarray within the Cabinet over the ultimate terms of a long-term deal with the EU… One EU source said the issue of extending transition beyond 2020 had been raised in talks, but without specifying a preferred end date; a second source said the UK side had raised the possibility of continuing until December 31 2021 – taking transition to two years nine months. A Government spokesman said: “This is a categoric lie. The time limited period should be determined by the length of time it takes to put in place new arrangements and we believe that should be around two years.” – Telegraph (£) Exclusive: UK considers asking Brussels for a longer transition period – Independent British officials ‘in talks with Brussels to extend Brexit transition period to almost three years’’ – Daily Mail Britain in ‘talks with EU bosses to extend Brexit transition to three years’ – Mirror EU is open to Brexit transition lasting beyond 2020, sources say – Bloomberg Brexit may need time, but Remainers will exploit even the slightest delay – Asa Bennett for the Telegraph (£) UK economy defies gloomy predictions with 1.8pc growth in 2017 UK GDP rose 0.5pc in the fourth quarter and 1.8pc in the full year compared with 2016, according to preliminary figures from the Office of National Statistics. Growth was driven by the dominant services sector, with business services and finance helping to boost the sector by 0.6pc compared to the third quarter. Economists had forecast growth to be 0.4pc in the fourth quarter and 1.4pc for the year… Industry recorded 0.6pc growth thanks to another strong quarterly showing by the manufacturing sector. Growth could have been higher but for a “significant fall” in oil and gas extraction due to an outage in supply from the Forties pipeline from the North Sea. Across the year, industry grew 2pc. Ian Stewart, chief economist at Deloitte, said that the “strong global recovery and a weak pound” had been factors that boosted UK exports and manufacturing. – Telegraph Project Cheer: Britain’s economic growth speeds up despite dire warnings by Remainers – The Sun Brexit boom is here as economy soars to defy doom-mongers – Express Boost as economic growth is higher than predicted – The Times (£) Mark Carney claims Brexit has cost UK economy ‘billions of pounds’ – Bloomberg UK interest rate rises tied to Brexit talks, BoE signals – FT (£) Why the pound is finally edging back towards a level not seen since before Brexit – Ayesha Javed and Ashley Kirk for the Telegraph (£) Whisper it, but we’re doing better than expected – Andrew Lilico for CapX The ‘experts’ must learn their lesson from Project Fear’s failure – Matthew Lynn for the Spectator Including financial services in Brexit deal could be a mistake, according to new report The U.K.’s fixation with getting a deal with the European Union that covers financial services may be an error, according to a new report. Research by The UK in a Changing Europe, a London-based think tank, shows that financial services are likely to be among the least affected by a no-deal Brexit because they are already highly globalized and don’t depend greatly on markets in the European Union… “While financial and manufacturing services are very important, the U.K. government’s emphasis on securing special UK-EU agreements for City-based financial markets may be misplaced,” said Professor Raquel Ortega-Argiles of the University of Birmingham, who led the research. – Bloomberg Research finds impact of Brexit on financial services will be negligible – UK in a Changing Europe UBS seeks to keep as much as possible in UK amid Brexit – Bloomberg Frankfurt residents ‘furious’ at threat of British bankers – Express UK Bombardier staff ‘breathe sigh of relief’ after victory in US trade dispute Aircraft manufacturer Bombardier has won its case against plans for huge tariffs on its US imports which had put thousands of jobs at risk in Northern Ireland. In a surprise decision, the US International Trade Commission (ITC) ruled in favour of Bombardier over American firm Boeing, which claimed its rival received unfair state subsidies from the UK and Canada. The decision blocks US government proposals to slap 292% tariffs on Bombardier C-Series passenger planes, which risked thousands of jobs in Northern Ireland where the jets’ wings are made. Bombardier, which employs more than 4,000 people in Belfast and contributes an estimated £400m to the Northern Ireland economy, said the C-Series jets were “critical” to its operations there. – Sky News James Forsyth: Don’t crumble now Theresa May, be strong and lead ministers through Brexit crisis Hammond’s remarks were another demonstration of the battle inside government over Brexit. Boris Johnson is currently preparing his case for a liberal Brexit speech, which he aims to deliver next month, and it is safe to say that it will be arguing for something a lot bigger than “very modest” changes. But for all their differences over Brexit, Philip Hammond and Boris Johnson’s private critiques of the Prime Minister are almost identical. In the last ten days, both have lamented to close allies that Theresa May won’t make a decision — that Britain is at a nation-defining moment in its history and that there is no real leadership. Their interventions are an attempt to provide that leadership, to give people an idea of what Brexit will be like. The best way for Theresa May to get her Cabinet to start singing from the same hymn sheet would be for her to be loud and proud about the kind of Brexit she wants. It is the leadership vacuum that she has created that these ministers are trying to fill. The lack of leadership is also what is driving many Tory MPs to wonder if it might be worth replacing her. – James Forsyth for The Sun May is to blame for this row between Philip Hammond and Jacob Rees-Mogg – Andrew Grice for the Independent Aarti Shankar: A new customs union with the EU is not the answer Operating in a customs union with the EU post-Brexit would come with high long-term political costs. As a representative from Turkey’s main business lobby said this week, the Turkey-EU customs union is “an asymmetric relationship.” Each time the EU strikes a new free trade agreement, Turkey is required to open up its goods market—tariff-free—to these countries, without receiving reciprocal preferential access in return. It has no decision-making powers over what countries the EU strikes deals with, nor can it represent its interests or exert influence in trade negotiations. This is not a sustainable or suitable long-term arrangement for the UK once it is out of the EU… Maintaining a truly frictionless customs union with the EU post-Brexit would entail high political and long-term economic costs for a non-member state like the UK. In essence, it would set the path for continued deep integration with the EU single market and the European regulatory model, but without being able to exert influence or represent its own interests. – Aarti Shankar for Prospect Magazine Adam Boulton: Italy could be Britain’s most influential ally during Brexit It didn’t take much to persuade me to go to Venice last weekend, even though the invitation was to an off-the-record conference organised by the Italian government to brief UK journalists on what is going on Italy. For all the attractions of the city, I was surprised by the calibre of the turnout which included ministers, ambassadors and media grandees. “What does Brexit mean to Italy?” and “What’s going to happen in the Italian elections on 4 March?” were two predictable questions to which the reporters wanted answers. But it soon became clear that many saw a deeper affinity between Italy and the United Kingdom. Potentially Italy could be Britain’s most sympathetic and influential ally inside the EU during the Brexit process. – Adam Boulton for Sky News Brian Monteith: Boris is spot on in his lonely bid to make the positive case for Brexit In reminding the cabinet that voters will be looking for rewards from Brexit, Boris is being an honest politician looking towards the government’s (and dare I say it, the country’s) own interests. If there are no rewards, no Brexit bonuses, then what will be the point? The people voted for change, and politicians who support it should be pointing to a variety of outcomes that Brexit can make possible. The absence of such a strategy only feeds the suspicion that the Prime Minister does not believe in the project and is using weasel words to convey she is leading from the front. She takes the “lead” by responding to Michel Barnier’s positions, instead of striking her own. – Brian Monteith for City A.M. Brexit in brief Milk will be the measure of our politicians’ success in solving the Irish border conundrum – Juliet Samuel for the Telegraph (£) A Brexit bonus (and comfort food) for a civil service under fire – Sue Cameron for the FT (£) Britons favour second referendum by 16-point margin, poll claims – Guardian UK will jump to front of the queue for US trade deal, says Trump aide Mnuchin – Telegraph (£) UK too slow in making its Brexit demands for trade, say EU diplomats – Guardian EU members shouldn’t share debt: Dutch PM lays out integration red lines to Brussels – Express Fury as new EU fishing rules to leave European waters ‘in a worse state’ – Express Tory Leave MP Matthew Offord left with cut on his face after Brexit pub bust-up – Mirror Tory MP in Brexit bust-up at Westminster boozer – Guido Fawkes